Upcoming Deal Trends for 2024

The deal market in 2024 is likely to see an improvement from the difficulties of 2023. The rate of inflation has slowed down and could even begin to decrease and interest rates have stabilized (though they’re not likely to be back to pre-pandemic levels), private credit is becoming more accessible to http://thisdataroom.com/ finance more types of deals, and traditional equity markets have gained ground, with record-breaking highs.

Deal making is hampered by a number factors. The first reason for the slowdown in M&A activity is mostly due to capital shortages. The rising interest rates have altered the economic landscape, making it less attractive to invest in growth through acquisitions or new investments. This is particularly relevant for the US that accounts for a substantial part of the global deal value with two thirds of the top hundred deals of 2021 being either a US company or targets.

A second issue is that increased scrutiny by regulators is limiting M&A. Concerns over national security, antitrust and other issues are putting greater scrutiny on larger deals and limiting the scope for industry consolidation. The trend is expected continue until 2024.

Third, the emphasis on generative AI (GIA) will lead to more capability-building M&A. M&A will be utilized by companies that lack the time or skills to build GIA capabilities internally. The environmental governance, social and governance (ESG) agenda is continuing to gain traction among CEOs. Increasingly, they will seek to boost ESG initiatives through acquisitions which will assist them in achieving their earnings, growth and valuation goals.

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